April 19, 2024

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[THE INVESTOR] Former Minister of Health and Welfare Moon Hyung-pyo was arrested on Dec.28 for having allegedly exerted his influence in getting the state-run National Pension Service to vote for the controversial merger between Samsung Group’s two affiliates Samsung C&T and Cheil Industries in 2015.

The special independent counsel that is investigating the influence-peddling case surrounding President Park Geun-hye and her long-time confidante Choi Soon-sil arrested the former health minister without a warrant over concerns that he could destroy evidence.

Moon, who was summoned as a witness for questioning a day before, reportedly denied that he had made an attempt to back the merger of the Samsung affiliates, which stands in contrast to testimony by figures involved in the same case, including Hong Wan-seon, a former chief of the NPS’s fund management division.

The former NPS official said during questioning that the pension fund, one of the largest shareholders of Samsung C&T, had been pressured by the Health Ministry to vote in favor of the merger despite recommendations from some global investment advisory groups to disapprove the deal.

The merger, which some critics had argued would undermine shareholder value of Samsung C&T due to an unfair stock swap ratio, was approved by a slim margin in a shareholder vote in July 2015.

The independent counsel will further try to find links between the NPS, the merger deal and President Park.

President Park is suspected of having directed -- allegedly at the request of her long-time friend Choi -- the Health Ministry and NPS to support the merger.

A month after the merger, Samsung Group inked a 22-billion-won (US$18.2million) contract with Core Sports, a German paper company run by Choi Soon-sil, to support six dressage athletes. Most of the funds were used to purchase equestrian equipment and horses for Choi’s daughter Chung Yu-ra, a former equestrian athlete.

The independent counsel is expected to call in Park Sang-jin and Jang Choon-ki of Samsung, who played a key role in making the contract with Choi’s paper company, once again for further investigation. It has not been decided if the investigation team will summon Samsung heir and Vice Chairman Lee Jae-yong for questioning.

By Kim Young-won (wone0102@heraldcorp.com)